INTEREST RATE LIBERALISATION IN WEST AFRICAN COUNTRIES: CHALLENGES AND IMPLICATIONS

This paper reviews the challenges and implications of the interest rate liberalisation policies implemented in some West African countries. The literature reviewed so far shows that, the outcomes of interest rate liberalisation, as implemented in Nigeria, Ghana and Ivory Coast, are positive. However, in some instances the implementation of the policy has led to challenges in other sectors of the economy. The paper, therefore, is of the view that, careful consideration should be given to the interest rate liberalisation policy in developing countries, especially primary commodity exporters like Nigeria, Ghana and Ivory Coast. In all three countries, the results of implementing these policies support numerous past studies that have reported positive outcomes regarding the effects of interest rate liberalisation on economic growth. The paper thus concludes that interest rate liberalisation polices, together with other real sector policies, have a positive impact on economic growth in the countries under review. However, policy makers should put in place alternative policies in order to deal with any possible challenges that may occur as a consequence of the implementation of interest rate liberalisation in these countries.